The European Green Deal’s Carbon Border Adjustment Mechanism
![](https://info.terralytiq.com/wp-content/uploads/2023/07/CBAM-chart.jpg)
The CBAM requires companies importing goods into the EU to report the emissions baked into these goods to the CBAM authority. Importers and especially small and medium-sized enterprises (SMEs) face financial repercussions if they use incorrect emission factors to calculate these emissions, potentially increasing costs substantially. Supplier- and location-specific emission factors are crucial for precise reporting and encouraging global partners to adopt sustainable practices. Obtaining such factors poses challenges, including data availability and transparency issues, complex supply chains, and financial constraints. Importers can overcome these obstacles through collaboration, digital solutions, government support, and engaging suppliers on sustainability. Embracing accurate emission factors empowers these companies to support climate goals and foster sustainability in international trade.